How to make blood splatter effect in the Blender Game Engine
Almost every game uses pre-rendered animated (sometimes) transparent textures applied to a quad attached to the camera rendered in front of everything else for such effects (the same way as a HUD is).
Such effects include, but are not limited to, rain drops, blood, damage (eg. red blinking emboss, injury texture, blood splatter).

It is both pointless and very CPU and GPU intensive to do it in 3D and/or in realtime. Pointless as since it is applied to the "camera" it follows the camera, so since it is viewed from one angle, there's no point in it being 3d rather than 2D and it is too CPU/GPU intensive to render it in realtime as fluid dynamics are still not fast enough for the average consumer GPU.

If you want the blood to increase as the health decreases, there are several design choices which can be used:

1) Apply several blood splatter textures on the same quad, on top of each other

2) As some games do it, just add a second red emboss texture quad on top of the blood quad as the damage increases. That texture can also be blinking (animate the transparency, or have the texture an animated video file or sequence of image files).

3) Have a blood animation where just a few blood drops flow to form a big blood pool and navigate to the corresponding frame as the damage increases (eg. if health is 100, set frame to 0, if 01, set frame to 120).